When Apple Valley Ford extended its shop hours to 1 a.m. four years ago, everyone said the dealership was crazy. Now other Minneapolis-area dealers are following suit, adding a second shift that works until midnight or 1 a.m.
About a year ago, Apple Valley Ford became the only dealer in the area offering 24-hour service. 'The investment is huge, but people want convenience,' says Jerry Bauer, service manager of the Apple Valley, Minn., dealership. 'We get a lot of maintenance stuff at night and a lot of emergency repairs.'
Apple Valley is at the forefront of a trend among dealers to emphasize the maintenance and light repair business.
'The ones who are on the leading edge, who are increasing their business dramatically are focusing on customer convenience,' says Lloyd Schiller, president of Dealer Service Corp., a Clemmons, N.C., consulting firm specializing in fixed operations.
As vehicle quality improves, warranty work is expected to dwindle. Warranty work represents just under 20 percent of service and parts revenues, according to the National Automobile Dealers Association.
'Years ago warranty used to be 40 percent of (fixed operations) sales,' says Jack O'Neill, dealership operations manager for NADA. 'But cars are getting better and manufacturers would like to see warranty work come down.'
For example, Ford Motor Co.'s Customer Service Division has adopted tougher language in its owner's manual for the 1998 model year. 'It says failure to maintain the vehicle according to their maintenance guidelines will void the warranty. That's in pretty bold print,' says Roger Tapps, service director for Griffith Ford-Lincoln-Mercury Inc. in Carroll, Iowa.
The dealership is training its salespeople to make car buyers aware that the factory's maintenance schedule is mandatory. It is also giving service writers financial incentives to sell maintenance work and keep customers on the schedule.
Service advisers get daily cash bonuses of $5 if they sell one maintenance item, $10 if they sell two items and $25 if they sell three items, says Tapps.
According to industry consultants, some of the top methods for boosting customer-pay business are extended hours, aggressive pricing, and vehicle pickup and delivery.
Griffith Ford-Lincoln-Mercury revised its maintenance menu in June, adopting prices at or below pricing at the fast lubes, muffler shops and tire stores.
The shop also offers a 10 percent discount on parts and labor for a 30,000-mile maintenance package.
'We did some price surveys. We are 60 cents lower on an oil change and $4 to $6 cheaper on alignments,' says Tapps. 'Most people take for granted that dealerships' prices are higher.'
The pricing strategy has gotten results. In its first two weeks, the revised menu increased customer-pay revenues by 10 percent, he says. Hours per repair order jumped to 1.7 from 1.3.
Apple Valley Ford also advertises competitive menu prices. The shop posts a sign comparing its prices for maintenance against prices for Jiffy Lube, Goodyear and Firestone. The sign is titled: 'We shop the competition so you don't have to.'
But the biggest contributor to the shop's 40 percent jump in service and parts revenue over the last three years has been its extended hours. The shop averages $900,000 a month in revenues, compared to $600,000 a month in 1994, says Bauer.
Between 9 p.m. and midnight, the shop probably sees 25 to 30 walk-in customers. During the third shift - between 10 p.m. and 6: 30 a.m. - the shop has 10 to 15 emergency repair jobs.
'We get referrals from the state patrol. They know we're open,' says Bauer.
Perhaps one of the most dramatic instances of dealers' emphasis on customer convenience is the pickup and delivery service offered by Viti Inc., a Tiverton, R.I., Mercedes-Benz dealership.
The shop will pick up a customer's car and deliver a service loaner anywhere within nine states - Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont.
The dealership has sunk more than $500,000 in a fleet of 50 loaner cars alone and pays $7,000 a month for fuel.
It hires 27 to 30 drivers, mostly retirees and college students.
About 60 percent of the shop's business comes from outside Rhode Island and 90 percent of its customers take advantage of the pickup and delivery service, says Jim Gray, service manager.
About 65 percent of the shop's revenues come from customer-pay jobs, he says.
Back to basics
But some of the simplest and easiest ways to jump-start maintenance business are not often used, consultants point out.
Service writers have been reduced to order-takers, rather than sellers of maintenance and repairs.
'One thing many service departments fail to do is take full advantage of a service menu,' says Willis Brinkley, director of fixed operations for Automotive Resources Development Inc., a Springfield, Mo., fixed operations consulting firm.
Consultants have seen sales increases of 15 to 20 percent when service writers are encouraged to promote scheduled maintenance off a simple menu.
Service advisers also should record most of the repair orders over the phone to shorten the write-up process when the customer gets to the dealership, says Schiller. Once the customer arrives, the service writer should inspect the vehicle for small items such as worn belts and hoses and burned-out bulbs, he says.
And getting cooperation from the sales department also can help draw customers in for maintenance work. Richard Libin, executive vice president of Automotive Profit Builders, a Wayland, Mass., automotive consulting firm, says salespeople should be held responsible for scheduling their customers' appointments for maintenance. The salesperson, Libin explains, has developed a rapport with the customer after selling him a vehicle.
Donna Lawrence Harris is a Washington-based staff reporter for Automotive News.